Difference Between Condition Precedent and Condition Subsequent Clauses
The concepts of Condition Precedent and Condition Subsequent are crucial in contract law. Both are types of contingent conditions, which mean they depend on the occurrence or non-occurrence of a specific event. However, they operate at different stages of a contract and have distinct legal effects.
✅ 1. Condition Precedent:
Definition:
A condition precedent is a clause in a contract that must be fulfilled before a party is obligated to perform their part of the contract. If the condition is not satisfied, the contract does not become effective, or performance is not required.
Key Characteristics:
Occurs before a duty to perform arises.
If the condition is not met, there is no obligation to perform the contract.
Often seen in real estate, insurance, or employment contracts.
Example:
A agrees to sell land to B, provided B obtains government approval. B must get the approval before A has to sell.
Case Law:
Pym v. Campbell (1856) 6 E. & B. 370
Facts: A contract was signed for the sale of a patent, but the parties agreed it would only be binding if approved by a third party.
Held: Since the approval was a condition precedent, the contract was not binding until that condition occurred.
Legal Effect:
Until the condition is fulfilled, the contract is in suspension.
If the condition never occurs, the parties may be released from their obligations.
✅ 2. Condition Subsequent:
Definition:
A condition subsequent is a clause that terminates an existing contractual obligation upon the occurrence of a specified event.
Key Characteristics:
Occurs after a duty has already arisen.
It discharges the obligation if the condition occurs.
Often used in employment contracts, leases, or performance guarantees.
Example:
A company agrees to employ a worker, but if the employee fails a background check later, the contract will be terminated.
Case Law:
Head v. Tattersall (1871) LR 7 Ex 7
Facts: A horse was sold with the option to return it if it didn’t meet certain conditions. The buyer returned the horse, but the seller argued the right had lapsed.
Held: The condition subsequent allowed termination of the contract, and the buyer exercised it in time.
Legal Effect:
The contract is valid and binding until the condition occurs.
If the condition subsequent happens, the party is released from further obligations.
🔍 Comparison Table:
| Feature | Condition Precedent | Condition Subsequent |
|---|---|---|
| Timing | Before contract/performance begins | After contract/performance begins |
| Effect if condition occurs | Obligation arises | Obligation ends |
| Effect if condition does not occur | No obligation created | Obligation continues |
| Example | Approval required before sale | Job ends if license is revoked |
| Key Case | Pym v. Campbell | Head v. Tattersall |
✅ Conclusion:
Condition Precedent = "Trigger" for starting contractual duties.
Condition Subsequent = "Kill switch" that ends contractual duties.
Understanding the difference is crucial for drafting and enforcing contracts. Courts interpret these clauses based on intent, wording, and context, so clarity in contract language is key.
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